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SoftBank shares jump 20% on record buyback announcement

The logo of SoftBank Group Corp is displayed at SoftBank World 2017 conference in Tokyo

By Sam Nussey and Kane Wu

TOKYO/HONG KONG (Reuters) - SoftBank Group Corp <9984.T> stock jumped 20% on Tuesday, extending a run that began a day earlier when the Japanese tech investor announced up to $41 billion in asset sales and a record share buyback to shore up its collapsing share price.

SoftBank shares ended Monday up 19%, hitting their daily limit, after the conglomerate said in the early afternoon it would buy back up to 2 trillion yen ($18 billion) worth of shares in addition to an up to 500 billion yen purchase announced earlier this month.

"We would have ideally preferred such an announcement from a position of strength and not because the (SoftBank) stock came under tremendous pressure," Jefferies analyst Atul Goyal wrote in a note, upgrading his SoftBank stock rating to "buy".

Selling down SoftBank's stake in domestic wireless carrier SoftBank Corp <9434.T> to 50% could raise around $10 billion while retaining control of the company, Goyal wrote.

SoftBank also owns 25% of Chinese e-commerce major Alibaba Group Holding Ltd <BABA.N> <9988.HK> - a stake currently worth around $120 billion.

Alibaba's New York-listed shares have declined 17% year-to date.

A partial sale of SoftBank's stake is likely, a person familiar with the matter told Reuters, with shares likely to be sold into the open market rather than back to the company.

Alibaba buying back shares from SoftBank will not please its shareholders, "you are only making Masa Son happy. SoftBank wants to sell urgently but Alibaba is not in such a rush," the person said, who was not authorized to speak with media on the matter and so declined to be identified.

Alibaba declined to comment. SoftBank did not immediately respond to a request for comment.